European market

The grain market is gradually regaining momentum in these early days of the year. Activity, however, has not yet returned to full speed, with operators on holiday in Spain for Epiphany or in the Black Sea region for the Orthodox Christmas celebration.

FOB prices are showing little movement from major exporters, both for wheat and corn, in a context of restrained selling. Notably in wheat, Jordan purchased 60,000 mnt for early April at 260 $/t CFR.

Funds appear to have regained an appetite for grains at the start of the year, which partly explains the fairly firm performance of prices since the beginning of the week on the Paris and Chicago futures markets.

The weakening of the euro/dollar below 1.1700 is another factor supporting European prices.

Geopolitics is also playing a role in market volatility. In Ukraine, the numerous recent damages to infrastructure continue to slow exports of grains and oilseeds. Operators are also closely monitoring ongoing trade negotiations between China and Canada, with the resumption or not of Canadian canola purchases, suspended since September by China.

European rapeseed, meanwhile, continues its rebound on Euronext, supported by crushers returning to the market.

American market

As at the start of every year, the reallocation of assets in fund portfolios brings its share of volatility to the grain market. Investors thus appear to be showing greater buying appetite for the grain sector on the Chicago market since the beginning of the week.

However, profit-taking pushed wheat, soybean and corn prices into the red at yesterday’s close in Chicago.

A sense of firmness remains, with operators awaiting the upcoming USDA report on January 12. Corn will notably be in the spotlight, given the wide divergences among analysts regarding estimates of the latest US crop.

For wheat, the spread of winter drought across the Great Plains is beginning to affect HRW wheat conditions. Yesterday, the USDA published its first crop ratings since November 24, showing slight declines in Colorado, Nebraska, Texas, Oklahoma and Kansas.

In soybeans, operators’ attention remains focused on China. The reason: yesterday, the USDA announced a new exceptional sale of 336,000 mnt of US soybeans to China. Market rumors suggest an even larger volume, which would bring Chinese purchases since late October close to the symbolic threshold of 10 mnt.